AUD/USD’s decline last week suggested that corrective recovery from 0.6864 has completed 0.7022, after rejection by 55 day EMA. Late breach of 0.6864 support argues that fall from 0.7295 is resuming. Initial bias stays on the downside this week. Sustained trading below 0.6864 will pave the way to 0.6722 low. On the upside, break of 0.6918 will delay the bearish case and turn intraday bias neutral first.
In the bigger picture, with 0.7393 key resistance intact, medium term outlook remains bearish. The decline from 0.8135 (2018 high) is seen as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.
In the longer term picture, prior rejection by 55 month EMA maintained long term bearishness in AUD/USD. That is, down trend from 1.1079 (2011 high) is still in progress. Sustained break of 0.6826 will target 0.6008 low and then 61.8% projection of 1.1079 to 0.6826 from 0.8135 at 0.5507.
